The building industry’s revival lost some momentum in September but continued growing at a “solid” pace, according to figures released today.
The Ulster Bank Construction Purchasing Managers' Index (PMI), which tracks the sector's performance on a monthly basis, dropped to 55.8 in September from 56.5 in August, indicating that while the industry grew, the pace of expansion slowed.
The index takes 50 as its benchmark. Any reading above that figure indicates that the industry expanded, while any result below that indicates that it shrank.
September’s reading of 55.8 means that the industry has been expanding for two years. It recorded its first month of growth since 2007 in September 2013.
For the first time since June, all three industry sectors, housing, commercial and civil engineering – which is mainly made up of large-scale State-funded projects, grew last month.
Housing hit 55.6 from 54.4, growth commercial slowed slightly, to 56.4 from 56.9 and civil engineering hit 51.7 from 48.4.
Simon Barry, Chief Economist Republic of Ireland at Ulster Bank notes that the industry continued to experience solid but slower growth in September.
“The headline PMI fell to its lowest level since March but, at 55.8, last month’s reading remains well above the 50 breakeven level and indicates that firms continue to report widespread expansion,” he says.
“While the overall story remains one of continuing construction sector expansion, the fall in the September headline PMI index represented the third consecutive monthly decline.
“That pattern suggests that momentum behind the recovery slipped a little through the third quarter, a trend that bears watching in the months ahead.” he adds.
However, Mr Barry points out that that a healthy trend in new orders indicates that there is little reason to be concerned.
New orders picked up at a rapid rate in September and the pace increased for the second month running.
Job numbers continued to rise as companies took on more staff to meet increased demand. They also stepped up their use of sub contractors, but at a more modest pace.
The rate at which their costs have been growing also slowed and most of Septtember’s increases were due to the euro’s weakness, which pushed up the prices of imported goods.
